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ARM
A mortgage where the interest rate adjusts periodically based on the changes of a specified index.adjustment date
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).
adjustment period
The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).
amortization
The repayment of a mortgage loan by installments with regular payments to cover the principal and
interest.
amortization term
The amount of time required to amortize the mortgage loan. The amortization term is expressed as a
number of months. For example, on a 30-year fixed-rate mortgage, the amortization term is 360
months.
annual percentage rate (APR)
The cost of a mortgage stated as a yearly rate; includes such items as interest, mortgage insurance,
and loan origination fee (points).
application
A form, commonly referred to as a 1003 form, used to apply for a mortgage and to provide information
regarding a prospective mortgagor and the proposed security.
appraisal
A written analysis of the estimated value of a property prepared by a qualified appraiser.
appraiser
A person qualified by education, training, and experience to estimate the value of real property and
personal property.
appreciation
An increase in the value of a property due to changes in market conditions or other causes. The
opposite of depreciation.
asset
Anything of monetary value that is owned by a person. Assets include real property, personal
property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and
so on).
assignment
The transfer of a mortgage from one person to another.
assumable mortgage
A mortgage that can be taken over ("assumed") by the buyer when a home is sold.
assumption
The transfer of the seller's existing mortgage to the buyer.
assumption clause
A provision in an assumable mortgage that allows a buyer to assume responsibility for the mortgage
from the seller. The loan does not need to be paid in full by the original borrower upon sale or transfer
of the property.
assumption fee
The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of
an existing mortgage.
